THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOHN KING, HOST: Thanks Wolf and good evening everyone.

President Obama is the driving force in our politics today for a number of very big reasons. One, an apologetic phone call with Shirley Sherrod. She joins us in just a moment to share the details. Two, another big legislative victory. This one an extension of unemployment benefits on the heels of that big Wall Street reform bill.

But is that it this midterm election year or will the Democrats push for tough votes on energy and immigration? And three, new numbers likely to impact that debate over the agenda and whether the president has any political capital left to spend. Here are the numbers.

Stark evidence that divided and polarized electorate; 47 percent of Americans approve of how the president is handling his job; 50 percent disapprove. The partisan divide is striking; 87 percent of Democrats approve of Mr. Obama's job performance; 84 percent of Republicans disapprove. A peek deep inside the numbers finds these two warning signs for the president and his party.

Older Americans are the most reliable voters and six in 10 Americans over the age of 65 disapprove of the president's job performance. And Independents settle most close elections. Again, six in 10 Independents disapprove of the president's performance. Just ahead we dig deep into how the president's political standing impacts his agenda and the mood among liberal and conservative activists gathering separately this week out in Las Vegas.

Here to help us is our lead panel tonight CNN senior White House correspondent Ed Henry, Perry Bacon of "The Washington Post" and CNN senior political analyst Gloria Borger. But first, that phone call with the president.

(BEGIN VIDEOTAPE)

KING: Ms. Sherrod thanks so much for joining us. First, a very straightforward question. Not many Americans get a chance to talk directly to the president of the United States, especially when the president of the United States wants to say I'm sorry. Take us inside that phone call.

SHIRLEY SHERROD, FORMER USDA OFFICIAL: OK. Well, you know, I was excited about being able to talk directly to the president. I really did not want the president to say to me, "I'm sorry". You know, he's the president of the United States. I didn't really need to hear him say those words. I did need to hear them from the secretary and some others, but not necessarily from him, so I didn't--

KING: Did he use those words? Did the president say, "I'm sorry"?

SHERROD: He didn't just come out and say "I'm sorry," but in every way the words he did say to me, I think, meant I'm sorry.

KING: And whenever you have a conversation with the president of the United States, you get a little nervous. I have been there myself in interviews with the president of the United States, this one and previous presidents. Then you walk away and then you think oh, I wish I had asked this or I wish that had come up. What was missing from the conversation now that you've had a couple of hours to reflect?

SHERROD: Well, we really didn't get a chance to go into some of the things I'd like to talk more deeply about, but he left that door for me to get information to him. He told me that individual who texted me can get directly into his office, so he left a way for me to communicate with him.

KING: Did he give you an explanation that you are comfortable with, satisfied with about how this happened, how his government -- he's in charge -- how his government decided to force you to resign before checking the facts, before getting the full picture?

SHERROD: No, we didn't really get into that. And I didn't press him to explain to me just why and why is it that they didn't looking more deeply. He said he really didn't know from the beginning, you know, and I can accept that maybe he didn't know, but someone in his -- in the White House knew, because I don't think the individual who said to me, "the White House wants you to resign," would have come up with that on her own. I know her. I knew her before she was at USDA.

KING: On that point I want you to listen to a brief snippet from Secretary Vilsack when he came out and apologized to you and said that this was a gross misjudgment. He took full responsibility but he did vaguely mention the White House. Listen to this for a sec.

(BEGIN VIDEO CLIP)

TOM VILSACK, AGRICULTURE SECRETARY: I'm not certain in what period of time the White House was contacted, but as these calls were being made, the White House through the liaison's office, was aware. But the decision to do what was done was done by me.

(END VIDEO CLIP)

KING: You're not convinced it sounds even after speaking directly with the president of the United States that that's the full story?

SHERROD: I'm fairly certain that if, you know -- I really believe the president when he said he didn't know, but I still stand by the fact that someone in the White House knew. Who that is, I don't know. Probably will never know, but I believe that's what happened.

KING: Help me better understand what the president said to you and the message you think he was trying to give to you.

SHERROD: Well, he wanted -- he was really trying to assure me that the secretary is serious about dealing with discrimination in the agency. He wanted me to know he was sincere with the offer. He talked about the things -- some of the things I've talked about over the last few days of things he has written in his book. So I think in that way he was trying to say to me I'm aware of some of the things he thinks I'm talking about. We really didn't get into it. I think I can still help shed some more light on just what we were getting at but not really getting at.

(END VIDEOTAPE)

KING: Much more of the conversation a bit later in the program. And Shirley Sherrod gets feisty about her critics and some long-time friends. But let's talk about the president's involvement in that part of the conversation with our panel here. Ed Henry, I was e- mailing with someone at the White House today, a relatively senior official who said in our view now that the president has spoken to her, they say they think it's over, but she's not satisfied.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: They desperately want this over. I was talking to another adviser to the president last night who in no uncertain terms told me how upset they are inside the West Wing about all this media coverage. They think the media has been fanning the flames, keeping this alive and throwing off the front page is the fact the president who won on Wall Street reform and also beat back the Republicans on getting unemployment compensation extension.

I think though the fact that she is still so composed and laying out the fact that she's convinced someone inside the White House knew this and Robert Gibbs for the second straight day today would not talk about who inside the White House talked to the Agriculture Department, and they will not make Cheryl Cook (ph) at the Agriculture Department available for questions. If there's nothing to hide, come out and say, here's who we talked to.

KING: On that point, Perry, the media couldn't be fanning the flames -- to use the White House words -- I don't accept that -- but the media couldn't be -- to use their words fanning the flames if they had not fired this woman without giving her a fair hearing and the president in an interview just a short time ago with ABC News he seems to understand that. Let's listen to the president.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: Partly because we now live in this media culture where something goes up on YouTube or a blog, and everybody scrambles. And I've told my team and I told my agencies that we have to make sure that we're focusing on doing the right thing instead of what looks to be politically necessary at that very moment. (END VIDEO CLIP)

KING: He jumps the gun. He says Tom Vilsack, but the president seems to (INAUDIBLE) this is their problem.

PERRY BACON, "WASHINGTON POST": He hit the right point, though, which is that the White House criticized -- all the time they criticize the 24-hour news cycle. We should -- the reporters are driving this story instead of the White House. They're upset (INAUDIBLE) all the time but yet they're so reactive to it. You saw they immediately fired this person because of what was on the news instead of ignoring it as he constantly talked about, so they really fell into their own trap again.

GLORIA BORGER, CNN SR. POLITICAL ANALYST: You know it's hard to avoid, honestly, because you're always in campaign mode now. There is no time when you just govern and get out of the campaign mode. And something like this happens, and you feel like you have to react to it very quickly. There's always incoming into the White House, right, always, every single day.

There has to be somebody who says, take a deep breath. And in this particular case the question is was there somebody at the White House who said take a deep breath, and was there somebody else who said no, no, no, we got to respond to this? Was it really an issue at the White House and does Ms. Sherrod know something that we don't know because it sounds like --

(CROSSTALK)

BORGER: It sounds like she does.

(CROSSTALK)

HENRY: I never thought I would see the day when the White House would prefer to talk about the oil spill, but I think --

(CROSSTALK)

HENRY: -- now they would.

UNIDENTIFIED MALE: There you go.

KING: Our panel is going to stay with us. A lot more to talk about, including some remarkable new poll numbers about how Americans feel at this key moment, 103 days until the election about their president.

Also the rest of my conversation with Shirley Sherrod including -- remember, Andrew Breitbart? He is the conservative blogger who started all this by putting up her misleading excerpt of her speech online. What would she want to say to him?

(BEGIN VIDEO CLIP)

SHERROD: I'd tell him he's a lie. (END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: This evening President Obama signed the newly passes extension of unemployment benefits. It's $34 billion bill and it restores benefits to nearly three million people until the end of November. Counting Wall Street reform, this is his second big victory in a week, and he doesn't appear to be getting much credit from the American people.

Let's continue our conversation. Our national political correspondent Jessica Yellin joins us from Las Vegas -- we'll explain why in just a second. Also still with us our senior White House correspondent Ed Henry, Perry Bacon of "The Washington Post" and our senior political analyst Gloria Borger.

When you look at these numbers, 47 approve, 50 percent disapprove, but when you look more closely because we're getting close to the midterm election, Independents critical in 50-50 races, 38 percent approval, 60 percent disapprove. Elderly Americans, those over the age of 65, perhaps the most important constituency in an off- year election; 40 percent; 59 percent disapprove. Ed Henry if you're the president and you're the leader of your party and it's your first mid-term election, that's a recipe for trouble.

HENRY: Absolutely, especially that Independent voter number. We all know they're the ones when they turn out, they decide these elections. In 2008 they broke for Barack Obama big-time against John McCain. They have got to get them back between now and November or --

BORGER: (INAUDIBLE) white men -- white men is a big problem right now for this White House. It's always been a big problem for Barack Obama, but some gave him the benefit of the doubt in the election last time. If white men turn decisively for Republicans, it's going to hurt congressional --

KING: And so Perry, you spent a lot of time covering Congress, and they have big decisions. Do you bring up a big energy bill that has what's called cap-and-trade or some kind of carbon tax? Do you bring up comprehensive immigration reform that both the White House and Harry Reid have promised to do and yet the president doesn't have much political capital there and as you well know, a lot of conservative Democrats are no thank you.

BACON: They decided no to both those things. I wrote today about the climate change bill is not going to happen. Immigration won't happen either. What they're finding is that they keep passing lots of bills, and because of the unemployment numbers and the economy, voters just don't seem to care or the voters are not rewarding them for all the stuff they're doing.

(CROSSTALK)

KING: Jessica -- let me bring Jessica Yellin into the conversation because she's out in Las Vegas. You have conservative and liberal activists who are involved mostly in Internet politics gathering in the same city at the same time and it seems relatively peaceful at the moment. Jessica when -- out there what is the conversation about the president's standing and especially among the liberals. They're foaming because they wanted more.

JESSICA YELLIN, CNN POLITICAL CORRESPONDENT: Yes, I'm with the Progressives Caucus here (INAUDIBLE) and the general sense here is that President Obama, while they recognized he's to some extent stymied by Republicans in Congress, isn't enough of a fighter for them. They'd like to see him put up more of a fight, tap further to the left, take (ph) solid ground on things like no offshore oil exploration.

They say he pre compromises on issues like energy and climate by saying OK, we'll allow offshore oil drilling before they've even begun negotiations on a climate bill which now is changing. They'd like him to be more of a fighter and stake out positions that he might not be able to win so that when there does become some compromise, it's not in their view as far to the right. And they actually think that's a winning formula because they argue that this is a populist nation and the general public including Independents would like a lot of those positions, John.

KING: And so, Jessica, what do they say when you ask them what if they don't do any of those things, they don't bring up energy, they don't bring up climate. They don't bring up immigration and other issues the left would like. Will they vote in November? Will they come out and support the Democrats or will they take it out on them?

YELLIN: They'll take it out on them. They make it pretty clear. They say, one, new voters probably won't be energized because they'll be disappointed, and two, they're willing to campaign against candidates who they think are too, in their words, moderate compromising and stick up for the fighters. People who in a primary the mainstream Democrats might say can't win, they say they'll back those -- they'll back the fighters. And they say even President Obama could suffer. Progressives might not get behind him with fervor in 2012 if he doesn't come their way and fight a little harder. That's what I'm hearing here, John.

KING: It is a fascinating moment in our politics. Every day ticking closer to a big midterm -- the tension in Vegas. Thanks, Jessica. Ed, Perry, Gloria, thanks for coming in.

A lot more to come in the program tonight, including we'll continue our conversation with Shirley Sherrod. Wait until you hear what she has to say about the conservative blogger who started this controversy and friends she thought were her allies in the NAACP. More on her call with the president.

Also tonight on our "Radar", how is it that 42 is greater than 44? No -- we know our math around here. We'll explain just why.

And John Boehner is being questioned -- he's the House Republican leader -- being questioned about his family ties, how close he keeps in touch. And in the "Play-by-Play" tonight, we've got a lot of fun for you. Arnold Schwarzenegger weighs in on the Mel Gibson controversy. The governor is always funny out there in California, and this is a big election about the economy. Other big issues, not one Colorado Senate race at the moment. It's about high heels and manhood.

(COMMERCIAL BREAK)

KING: The Internet is revolutionizing our politics and progressives from all over the country are in Las Vegas for the annual Net Roots Nation Convention. A bunch of conservatives are gathering out there as well. CNN contributor Erick Erickson, the editor-in- chief of RedState.com is out there with that group. Trust me, he's not with the liberals. Amy Goodman, host of the television and radio news show "Democracy Now!" is out with the progressives. A quick look before we talk to our guests, this is what happens online.

The explosion of political activity and if you look at more than 800 organizations that do some political content online, if you look here, about 30 percent, 28.9 percent are conservative, roughly equal, 28 percent are liberal. News organization information is about 7.1 percent, then so many of these others dedicated to specific issues on the spectrum.

As I walk over here to start the conversation, Amy, to you first. We just heard from Jessica Yellin who says progressives are disappointed. They want the president to fight more. They want him to do more. What is the leading issue among the progressives there, and are they positive or are they frustrated?

AMY GOODMAN, HOST OF "DEMOCRACY NOW!": Well first I want to just talk about the temperature, which is in the range of 107 to 113. That goes to the issue of global warming. And then when we flew in last night, the pilot said welcome to lost wages, right, for Las Vegas, highest unemployment here, highest bankruptcy and foreclosures, 15 percent unemployment almost.

And I think when you're dealing with these kinds of issues, people are angry and they feel that the president could be much harder on, for example, those big banks, even with what they call landmark financial regulation. We are talking about still maintaining banks that are too big to fail and people are very concerned about that as they are about war, as they are about the issue of immigration. They want him to take strong stands, but here it's not just about him. It's about people organizing amongst each other.

KING: Erick, give us the other side of the coin. Where is the energy on the conservative side?

ERICK ERICKSON, CNN CONTRIBUTOR: You know the group is smaller at right online (ph), but we have got CPAC in March which generally draws the big crowd. But they're very excited, although there's some -- there's some hesitation there. A lot of the conservative activists that are right online (ph) here really are concerned that the Republicans who led the GOP out of power in 2006 are going to be the same guys leading them back in, and they're still not sure that they seeing signs that these guys learned their lessons.

For example, Eric Cantor yesterday saying he wasn't sure if he wanted to repeal the financial reform regulation, which a lot of the guys at right online (ph) think was bad legislation. There's some un- comfort at the idea of taking back the majority, but real excitement at the idea as well.

KING: It's fascinating that both of you talked about dissatisfaction at the base level with their establishment figures, and the establishment leaders of the party. I want to share these numbers with you because we just have a new poll tonight, the approval of the president, and when you break it down, the partisan divide is startling and many would say unhealthy in the country.

Eighty-seven percent of Democrats approve of how the president is handling his job; only 11 percent of Democrats disapprove; but among Republicans only 14 percent approve; and 84 percent disapprove. That is the world you guys live in every day. It's the world you're in right now, the left versus the right. But is it healthy for our country that we are so polarized?

GOODMAN: Well I mean overall I think that people are organizing. They're getting their feet on the ground across the political spectrum. I also think here it's not about just making demands of the president. Here it's about people making connections, and that's what's most interesting, going from a session on mountain top removal in West Virginia to sessions on social networking.

People are turning to each other, and that makes and I think there are people you'd be surprised right and left who are here because those issues of economic recession for many a depression, foreclosure and bankruptcy. It unites people across the political spectrum.

ERICKSON: You know John, yes, there's a partisan division but I'm struck -- I'm still hung up on the CNN polling number from last month where Republicans more so than Independents are angry with Republicans as well. And you see that here among people who are self- identified Republicans more so even than self-identified conservatives.

There's just general dissatisfaction, which is it goes to this Tea Party movement where a pox on all of their houses so to speak. If the Republican leadership is going to have to show conservatives in particular that you know we're not going to abandon you when we get back into power. There's a great deal of mistrust still hung over from the end of the Bush administration with fiscal conservatives.

(CROSSTALK)

GOODMAN: And I think it's important, John --

KING: Go ahead -- go ahead, Amy --

GOODMAN: John, I was just going to say we're here in a bellwether state in terms of a Senate election. The only reason Harry Reid is ahead right now is because Sharron Angle, the Tea Party activist, has to say the least shot herself in the foot with her recommendation that people engage in Second Amendment solution -- in other words, shooting Harry Reid. It hasn't made her very popular here even with an unpopular senator.

KING: We're going to check in with both of you throughout the week, but I want to ask you this --

ERICKSON: John, let me just --

KING: Go ahead -- quickly -- Erick, go ahead.

ERICKSON: Well I saw a great bumper sticker today on Las Vegas plates -- Nevada plates that said, don't vote. The government wins either way.

KING: (INAUDIBLE) That's I think the sentiment you're both expressing. Let me ask you, Amy, Andrew Breitbart, who I asked Shirley Sherrod about him today and you'll hear her answer in a few minutes, but he gave an interview with "Politico" and he said this. "I am public enemy number one or two to the Democratic Party, the progressive movement and the Obama administration based on the successes my journalism has had." That is Andrew Breitbart's opinion of himself. I'm guessing, Amy Goodman, you don't share it.

GOODMAN: Well I don't think it's journalism. I think to say the least it's lies. It's editing deceptively videotape that could -- that almost destroyed a long-time civil rights activist. And you're going to be hearing from her I understand, Shirley Sherrod. I think what's of concern to people here, the bloggers, the writers, the activists is that the Obama administration responded so quickly on his side and had her fired or had her resign, although ultimately they've been forced to turn around. There is concern why isn't Obama listening to them the way he has listened to Andrew Breitbart and Glenn Beck and FOX.

KING: Amy and Erick, great to see you both. We'll check in as the week goes on. And Amy, I want to thank you for keeping Erick safe because he's in the lobby of the progressive meeting right now, maybe making some unorthodox friends. Thank you both. We'll check in a bit later.

Still ahead, the rest of our fascinating conversation with Shirley Sherrod after she talked with President Obama, also her thoughts on Andrew Breitbart, the conservative activist who as we just noted first put the misleading tape of her speech on the Internet.

(BEGIN VIDEO CLIP)

SHERROD: I'd tell him he's a lie.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: Welcome back. Let's check in now with Brianna Keilar for the news you need to know right now -- Brianna.

BRIANNA KEILAR, CNN CORRESPONDENT: John, the National Hurricane Center has upgraded tropical depression three to tropical storm Bonnie. It's expected to make its closest approach to the Florida Keys tomorrow afternoon, then pass west of the BP oil spill with winds pushing any flowing oil toward the Louisiana coast. It should hit Louisiana as late as Sunday. Governor Bobby Jindal declared a state of emergency late this afternoon. And National Incident Commander Thad Allen says there will be a decision point, as he calls it, about 90 minutes from now on whether to evacuate the well site because of the storm -- John back to you.

KING: We'll keep an eye on that one. Bri, thanks very much. Fascinating to watch that weather -- could be disappointing.

Now let's get back to my "One-on-One" conversation with Shirley Sherrod. We spoke a short time ago about her conversation today with President Obama.

(BEGIN VIDEOTAPE)

KING: Before this conversation with the president when you said you were hoping to talk to the president, you said, quote, "I know he does not have that kind of experience. Let me help him a little bit with how we think, how we live." I assume you mean growing up black in the segregated south. Did that come up at all?

SHERROD: That didn't come up, but that's exactly what I was talking about. And not just dwelling on the past, but the way things are now. You know, we are still not together in black and white community the way we should be at this point after the last 50 years of civil rights struggle. I had hoped we would have made -- we would have done more, let's say, to move beyond where we were, for example, when my father was murdered in 1965 or when the movement started in 1961 or when the Student Nonviolent Coordinating Committee was organized in 1960.

You know, we just celebrated the 50th anniversary of SNCC in April, and you would hope that after 50 years, we would not be having the conversations we've been forced to have over the last few days.

KING: Do you --

SHERROD: I would never have guessed.

KING: Right. Never have guessed.

SHERROD: I would just say I would never have guessed, I would have been caught up in anything like this 50 years later.

KING: And that you are, and that you had this extraordinary conversation with the president of the United States today. Does it bring you closer to closure for this horrific episode for you or do you leave the conversation, hang up the phone and have even more questions? SHERROD: I've had a conversation with the president. I've been told I can -- there are other ways I can get some of the issues that are some of the things I've allude to him. Nothing else has changed yet. There's still a lot more talking to be done, a lot more work to be done, a lot still quite a bit of discrimination that no one has really spoken to, the systemic discrimination that still exists in the U.S. Department of Agriculture. That's why not only do we have a black farmer's lawsuit but a Hispanic farmer, the Native American and women farmer's lawsuit.

And until we deal with some of what's happening there, until they, until the department heads feel that they can actually communicate with the lowly employees in that organization to get their perspective and not be so hung up on protocol, I think we will never get to where we need to be in making the real change there.

KING: I want to walk through some of the specifics then, and you've raised one of them right there. The secretary says in his phone call with you, he asked you to come back. It sounds to me like you think the department needs a lot of help. A specific question first, did he offer you your old job back and the choice of a different job, a higher ranking job or was there just one offer?

SHERROD: He only offered me a job in the office of outreach. Now, whether you look at that as being a higher position, I don't know. He did not offer my old job back, no. That has not happened.

KING: Would you like that job or are you going to take this other job?

SHERROD: You know, I just really can't say now. I'm at a place where I just need to get out of this frenzy, go home, and get my grandchildren and get to the point where I can think. I truly -- you know, when I say I don't know yet, you might think that's just something for the media, but it's truly how I feel right now. As I told him yesterday, I do need to think about this. I have not seen the position in writing yet. I need to also look at that, and just look at -- think about what kind of impact I can have at that level.

I know what I was doing at the state office level, you know, what would be expected of me. And the other thing that scares me. I wouldn't want everyone to think that now there's this one person who's supposed to deal with civil rights in the department and if we don't eradicate it, if we don't get rid of it, Shirley Sherrod is the person who's responsible for that.

KING: I can completely respect your need to think about this. I get that completely. You're 99 percent of the country would not know Shirley Sherrod if it were not for a conservative activist named Andrew Breitbart who posted a clip of your speech on his website. I had him on the program the other night, and I challenged him directly saying what he put on the website was out of context. He disputed that. I want you to listen to Andrew Breitbart.

(BEGIN VIDEO CLIP) ANDREW BREITBART, PUBLISHER BIGGOVERNMENT.COM: This was not about Shirley Sherrod. This was about the NAACP attacking the tea party, and this is showing racism at an NAACP event. I did not ask for Shirley Sherrod to be fired. I did not ask for any repercussions for Shirley Sherrod. They were the ones that took the initiative to get rid of her.

(END VIDEO CLIP)

KING: Miss Sherrod, if you had 30 seconds with Andrew Breitbart, what would you say?

SHERROD: I'd tell him he's a liar. He knew exactly what effect that would have on not only -- he knew what effect that would have on the conservative racist people he's dealing with. That's why I started getting the hate mail, and that's why I started getting the hate calls. He got the effect he was looking for.

KING: And you have said you're open to forgiving so many people involved in this saga including the Secretary of Education -- Agriculture. Excuse me, the president of the United States. Would you forgive Andrew Breitbart?

SHERROD: He would really need to come and sit down with me and look me in the eye so that we could see if we can find a place. I'm not saying I won't forgive him, but we'd need to see if we can find a place where that can happen. I don't see it at this point. He hasn't been willing -- he hasn't tried to apologize to me for anything he's caused me to go through.

KING: You mentioned your involvement in the civil rights struggle for so many years and the horrible murder of your father. One of the organizations in the middle of this controversy is the NAACP which historically has been right in the middle of that struggle. Ben Jealous, the head of the NAACP said this the other night on Twitter and tweet. He said, "spoke to Miss Sherrod earlier today and personally apologized. Plan to meet with her face to face next time I'm in Georgia."

But when all this happened, as you know, the NAACP quickly supported Secretary Vilsack's decision to force you to step aside, and Ben Jealous tweeted this. "Racism is about abuse of power. Sherrod had it at USDA. She abused a white farmer because of his race. NAACP is appalled." How did you feel that an organization founded on the basic premise, we need to treat everybody fairly, did not listen to your side of the story and check its facts before it said you were racist?

SHERROD: I could say to you that that hurt even more than what they did to me at the department because when you look at my history, when you look at my work, you know, I've stood for fairness and equality probably even more than the NAACP has. And for that organization, an organization I've supported through the years to come out and strike out at me without taking the time to look at me, the work I've done, and what I stand for, that really hurt. It hurt. They apologized, they retracted. I can accept that and move on. KING: I want to close by asking you to listen to something then candidate for President Barack Obama said back in March 2008. He was then a candidate for president. He gave a major speech on race in America, and he said this.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Contrary to the claims of some of my critics, black and white, I have never been so naive as to believe that we can get beyond our racial divisions in a single election cycle or with a single candidate, particularly -- particularly a candidacy as imperfect as my own.

(END VIDEO CLIP)

KING: Nearly two years into this administration, Shirley Sherrod, does this episode involving you, what does it tell you? Have we moved at all?

SHERROD: You know, I want to feel that we've made progress in terms of race relations, but, you know, when you really look at what happened here over the last few days, it looks like we sort of swept race relations under the rug and hoped that the problems would get solved while they were hidden. But that's not how we can do it. This has shown that we haven't made that much progress since 50 years ago when we started the civil rights movement. Yes, we've integrated some schools, kids go to integrated schools, we can get eat anywhere we want to, but what other real progress have we made?

(END VIDEOTAPE)

KING: Our thanks to Miss Sherrod for her time today.

When we come back, today's most important person you don't know has sent killers to prison for life. Now, she's hearing a case that could mean life or death. One of this year's most controversial new laws.

(COMMERCIAL BREAK)

KING: Today's most important person you don't know is the judge here in the government's challenge to Arizona's immigration law. U.S. district judge, Susan Bolton, was appointed back in 2000 by President Bill Clinton but on the recommendation of Republican senator, Jon Kyl. She was a state court judge before that and handles very interesting cases. One involved a man convicted of murder based on the DNA of seeds found near body and then in his pickup truck.

She gave him life in prison. Judge Bolton also imposed a life sentence on a woman convicted of killing her husband for his life insurance money. At 1997, case sparked in Arizona republic headline we couldn't pass up. Black (INAUDIBLE) married a former playboy bunny with a black heart. Bolton's latest case may not inspire much colorful headlines, but they'll certainly bigger.

Let's talk that and other items on my radar over with veteran Democratic strategist and pollster, Mark Penn, Republican, Robert Traynham, and our senior political analyst, Gloria Borger. Would you relish the spotlight, Mark, of being the judge handling this Arizona immigration law case or would you wish one of your colleagues got it?

MARK PENN, FORMER SR. ADVISER TO PRES. CLINTON: That certainly puts the judge in a tough position. Any ruling which way that judge is going to receive a lot of mails. So, it's a tough case, and it's going to take one tough judge to make a decision on that case.

ROBERT TRAYNHAM, BUSH-CHENEY 2004 CAMPAIGN ADVISER: No question about it. It's a tough position no matter what ruling the judge comes out with, again (ph) a lot of hate mail. I don't envy that person.

GLORIA BORGER, SENIOR POLITICAL ANALYST: The president is watching.

KING: The president is watching, that's a good one right there.

TRAYNHAM: And the tea party.

KING: During the conversation I had earlier today with Shirley Sherrod, we asked her about her opinion of President Obama.

(BEGIN VIDEO CLIP)

SHERROD: I voted for President Obama, and I will vote for him again. You know, there are some things I hope he would do differently, but, you know, I think he's getting there. He will get there. We need to give him a chance. I think we -- if we work with him, we can be satisfied with the results of all of us put the effort in and not just have it come from him.

(END VIDEO CLIP)

KING: Mark, as someone who's been around the president at times it difficult, this is sort of one of a surprising and out of the box -- I don't know if crisis is the right word or problem for the president to deal with. What have we learned about the president, the White House, and Shirley Sherrod this week?

PENN: I think Shirley Sherrod chose herself to be a true champion of civil rights and somebody who was falsely accused who stands up for her herself, and America loves someone who's falsely accuse accused, stands up for themselves and sets the record right. The administration didn't handle this, obviously, as well as they could, but really, I think, this reflects most negatively on the conservative movement. They look like they're ready to falsely cry racism. They look like they distort things. I think they've seriously hurt their credibility.

TRAYNHAM: The bigger (ph) should be squarely be pointed at the White House. They overreacted on this. They proved to the American people that they made some rookie mistakes. And the person that really should be applauded for this is the person that you just spoke to a few moments ago. This is a person, ironically, who was a bureaucratic down in Georgia who did the right thing, acted in a very rational way and juxtapose at to 1600 Pennsylvania Avenue didn't act in a very rational good way.

BORGER: What's interesting, though, we heard a lot of people admit they made mistakes this week. We don't hear that a lot in Washington, but we heard it. You know, from the president's Press Secretary to the Secretary of Agriculture and maybe, in fact, the president of the United States.

KING: I'm going to move on to a new Gallup Poll out that has what -- you might consider-- the numbers aren't so bad, but in comparison, not so good news for President Obama. As you can see, Mr. Obama trails the former president, Bill Clinton, in this Gallup Poll but is ahead of George W. Bush. The poll has a sampling air --

BORGER: This is ironic (ph).

KING: Plus, to remind us, of course (ph). That is a favorability rating in current and former presidents, and as we said earlier, it appears 42 is greater than 44, huh?

BORGER: Oh-oh Well, Mark, I'm sure you love this.

KING: Mark, you polled for President Clinton for long time. You want to somehow repudiate those numbers?

PENN: Sure. First, these are great numbers for President Clinton. You know, I polled for him for a long time, and it's wonder that so many people said after the campaign, he's this, he's that, he's back, he's back in a big way. He's a huge asset for Democrats. But let's remember, it's President Obama who is on the firing line these days, and at the same time of his presidency, President Clinton would have been lucky to have President Obama's ratings. When I started with President Clinton, he was at about 30 percent approval after the midterm Congressional race.

TRAYNHAM: We got to remember, during the 1990s take Bill Clinton's personal situations out of it, they were pretty good years both from an economic standpoint, the Republicans, and the Clinton White House has welfare reform. We had, obviously, some surpluses. So, in the grand scheme of things, people remember that the Clinton years were pretty good.

KING: In the ditch we're in now, they look better. I need to stop now right there.

High heels versus manhood in a Senate race out in Colorado. We'll show you when we return.

(COMMERCIAL BREAK)

ANNOUNCER: Here comes the "Play-by-play."

KING: Great tape to break down tonight in the "Play-by-play." And here to help, the veteran Democratic strategist, Mark Penn, and Republican, Robert Traynham. Let's start with Charlie Rangel. The former chair of the House Ways and Means Committee, one of the most powerful men in Washington. He was forced to step aside because of ethics allegations. Today, he learned that the House Ethics Committee will have a big eight-member panel which means a full investigation.

Charlie Rangel learned this. He was walking the halls of Capitol Hill, passed reporters, taking some questions. One of them asked by Luke Russert, the producer at NBC News, the son of the great late Tim Russert, and Luke asked a very good question. Are you worried you're going to lose your job?

(END VIDEO CLIP)

REP. CHARLIE RANGEL, (D) NEW YORK: You think I got my job? I was elected. How do you think I'd lose it?

LUKE RUSSERT, NBC NEWS: Because there are two ways. You could lose it after (ph) colleagues voted you out of here because of the ethic's violations or if your constituents --

RANGEL: What station are you from?

RUSSERT: NBC, MSNBC.

RANGEL: You're young. I guess, you need to make a name for yourself, but basically, you know it's a dumb question --

(END VIDEO CLIP)

KING: I'm going to go first in "Play-by-Play." It's not a dumb question, it's a good question and proves there Luke stood his ground, the apple doesn't fall far from a tree.

TRAYNHAM: You know, John, that is the height of arrogance. Just for someone that's a public servant, not only to dismiss a member of the press but not even answering a legitimate question. This is a person, obviously, who's been in the House for 40 plus years who has some serious ethic's charges around him, and I might add, this is a bipartisan commission that came to this conclusion. And for Mr. Rangel to conduct himself that way is very disrespectful (ph) towards the House.

PENN: Look, if we've learned nothing in the last couple of days, it's let's not judge allegations until the report is out.

TRAYNHAM: But it is out. This is an investigation that's been going on for quite some time.

(CROSSTALK)

KING: It's a perfectly fair question to say -- are you worried about losing your job, I guess --

(CROSSTALK)

KING: One of the battleground Senate race this year is out in the state of Colorado. And we know the big issue is the economy, energy, climate change, so many huge issues in the country, but this one is come down to some interesting things. Here's a candidate, Ken Buck. He's a Republican candidate, and he's at a rally on Saturday, and he's mad at Jane Norton and other Republicans, so he wants to make a point.

(BEGIN VIDEO CLIP)

KEN BUCK, (R) COLORADO SENATE CANDIDATE: Why should you vote for me? Because I don't wear high heels? She has questioned my manhood. I think it's fair to (INAUDIBLE). I have cowboy boots. They have real (EXPLETIVE WORD) and has real (EXPLETIVE WORD) in Washington, D.C. (EXPLETIVE WORD) --

TRAYNHAM: I have no response to that. I mean, obviously, it was a rookie mistake. I don't know what to say. It's not a very good thing for him to do, and he should be ashamed of himself for saying it.

PENN: One good ad? I think it's a really good ad. And, certainly, he committed a really a sexist sin in terms of him saying that because he didn't have high heels.

TRAYNHAM: You talk about putting your foot in your mouth.

PENN: Why are people still saying stuff like that, I don't know.

KING: I don't know, either. Before we go, let's sneak this one in real quick. Arnold Schwarzenegger, governor of California, action figure in the movies and comedian.

(BEGIN VIDEO CLIP)

GOV. ARNOLD SCHWARZENEGGER, (R) CALIFORNIA: But the good news is that BP has contained the oil leak. That is good news. Finally. Finally. The bad news is that no one has figured out how to contain Mel Gibson. Mel Gibson, no one knows how to contain. So, that's why I want to ask all of you to just please turn off your cell phones because we're expecting a call from him.

(COMMERCIAL BREAK)

KING: Couple of minutes away from the top of the hour and Rick Sanchez, let's check in for a preview. Hey, Rick. RICK SANCHEZ, CNN ANCHOR: I think, John, it's time to ask some very serious questions of a couple of different individuals. First of all, Andrew Breitbart, this is not the first time that he's been accused of having his hand in selective editing of tape, and we're going to show you some examples. But there's another point that needs to be made tonight, John.

What's going on over at Fox News? It's very legitimate question given what's gone on in the last 48 to 72 hours in this country. Are they'll really a news organization? And if so, which part? We're going to ask those questions, and we're going to look at it in-depth. That's what we're going to begin doing tonight with this debut show of "Rick's List Primetime." John, back to you, my colleague.

KING: In Washington, this question's all the time about your money and how it's spent and everybody says -- if we're going to balance the budget or even start bring the deficit down, something has to be cut. So "Pete on the street," he's not in New York tonight, he is right here in D.C., and Pete went out to find out what we got?

PETE DOMINICK, JOHN KING USA'S OFFBEAT REPORTER: I thought coming to Washington, D.C., everybody would have an idea of what they want to cut. This would be an easy, easy question. But you know you put people on the spot, they're not quite sure, but they certainly know what they want to cut from their personal lives. I went out to find out.

KING: All right.

(BEGIN VIDEOTAPE)

DOMINICK: What do you think our government spends too much money on?

UNIDENTIFIED FEMALE: Themselves?

UNIDENTIFIED FEMALE: Saturday mail delivery.

UNIDENTIFIED MALE: War?

DOMINICK: On war?

UNIDENTIFIED MALE: Yes, the army.

UNIDENTIFIED MALE: NASA.

DOMINICK: NASA?

UNIDENTIFIED MALE: Yes.

DOMINICK: You don't like space exploration?

UNIDENTIFIED MALE: No.

DOMINICK: Your dad hates the moon.

UNIDENTIFIED MALE: He doesn't hate anything.

Hold on a second.

DOMINICK: I'm putting words into your mouth.

UNIDENTIFIED FEMALE: I think they're cutting in the wrong places like education.

DOMINICK: What do you spend too much money on?

Not her. She just ran away from you.

UNIDENTIFIED MALE: The women in the United States for three months if they didn't buy anything, the whole country would go down.

DOMINICK: All citizen, very sexy citizen.

UNIDENTIFIED MALE: It's true.

DOMINICK: You should marry my wife. I bought her jewelry, and she told me to bring it right back.

UNIDENTIFIED FEMALE: Oh, no.

DOMINICK: Yes. That's a good one, right?

UNIDENTIFIED FEMALE: You never tell jewelry to bring back.

DOMINICK: He has too many hats.

UNIDENTIFIED FEMALE: Yes.

DOMINICK: (INAUDIBLE) so I'm not going to bust him.

UNIDENTIFIED MALE: The child?

DOMINICK: Yes. I'm sorry, we have to cut you from the budget.

You can come live at my house. I'll buy you all the popsicles you want. Are you in?